A merger agreement is finally complete for the merger of Albertsons and Safeway, a deal that was announced in March 2014.
The newly combined private company will operate 2,230 grocery stores in 34 U.S. states and the District of Columbia, along with 27 distribution facilities and 19 manufacturing plants with over 250,000 employees.
The new company will be comprised of three regions and 14 retail divisions, supported by corporate offices in Boise, Idaho; Pleasanton, Calif.; and Phoenix, Ariz. Banners will include Safeway, Vons, Pavilions, Randalls, Tom Thumb, Carrs, Albertsons, ACME, Jewel-Osco, Lucky, Shaw's, Star Market, Super Saver, United Supermarkets, Market Street and Amigos. In December, the companies announced the sale of 168 stores to four separate buyers, as divestitures required in order to secure U.S. Federal Trade Commission (FTC) approval of the transaction.
“We plan to be the favorite local supermarket in every community we serve," said Safeway President and CEO Robert Edwards, who becomes President and CEO of the newly combined company, effective immediately. “We will do this by knowing, listening to, and delighting our customers; providing the right products at a compelling value; and delivering a superior shopping experience. We will also continue to be active members of our local communities.”
Current Albertsons CEO Bob Miller will become executive chairman.
“This is a transformative day for both Albertsons and Safeway. This merger creates a unified, strong organization that is dedicated to bringing a better shopping experience to more customers across the country,” commented Miller. “Our combined geographic footprint, vast range of brands and products, and service-oriented staff will enable us to meet evolving shopping preferences.”
As a result of the completion of the merger transaction, the common stock of Safeway will no longer be listed for trading on the New York Stock Exchange or any other securities exchange.
AB Acquisition LLC, the owner of Albertson's LLC and New Albertson's, will acquire all outstanding shares of Safeway. AB Acquisition is controlled by an investor group led by Cerberus Capital Management, L.P. ("Cerberus"), which also includes Kimco Realty Corporation (NYSE: KIM), Klaff Realty LP, Lubert-Adler Partners LP, and Schottenstein Stores Corporation.
Safeway shareholders will receive $34.92 per share in cash, consisting of (i) $32.50 in initial cash consideration, (ii) $2.412 in consideration relating to the previously announced sale of the assets of Safeway's real-estate development subsidiary Property Development Centers, LLC ("PDC") and (iii) $0.008 in consideration relating to a dividend of approximately $2 million (after deduction for taxes at an assumed rate) that Safeway received in December 2014 on its 49% interest in Mexico-based food and general merchandise retailer Casa Ley, S.A. de C.V. ("Casa Ley"). In addition, shareholders will receive contingent value rights entitling them to pro rata proceeds relating to deferred consideration from the sale of PDC and any proceeds from the sale of Safeway's 49% interest in Casa Ley.
As a result of the completion of the merger transaction, the common stock of Safeway will no longer be listed for trading on the New York Stock Exchange or any other securities exchange. Safeway will file a Certification on Form 15 with the U.S. Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), to suspend Safeway's reporting obligations under Sections 13(a) and 15(d) of the Exchange Act.
